15
Morningstar FundInvestor
March 2
013
FPA
also announced it has hired Victor Liu for
FPA
International Value
. Liu, who previously had been
an analyst at Causeway, joins Pierre Py, who was part
of the duo that left Harris Associates. Py’s former
cohort, Eric Bokota, resigned last year because of
personal reasons. Also,
FPA
hired Melina Newman as
analyst for
FPA New Income
FPNIX
to focus on
corporate bonds, beefing up the firm’s capabilities in
this area after it missed out on buying cheap corpo-
rate bonds in late
2008
.
Vanguard Limits Growth of 2 Funds
Vanguard announced it would slightly limit new money
coming into
Vanguard Wellington
VWELX
and
Vanguard Intermediate-Term Tax Exempt
VWITX
.
You can still invest directly through Vanguard, but
Vanguard won’t open new accounts through other
brokerages. The $
39
billion Intermediate-Term Tax-
Exempt is the largest muni fund.
“Vanguard is proactively taking steps to reduce
cash flow into the Wellington and Intermediate-Term
Tax-Exempt Funds to ensure that their investment
advisors can continue to effectively manage the port-
folios,” said Vanguard
CEO
Bill McNabb.
It won’t likely have a big impact on the funds, but it is
an interesting signal for the funds and munis in partic-
ular as it’s rare to see any kind of closing at a muni
fund. Clearly they are concerned that existing share-
holders will be harmed by new money coming in and
causing managers to buy bonds with lower yields.
Fidelity Closes Small Cap Value
Fidelity is closing
Fidelity Small Cap Value
FCPVX
to new investors as of March
1
. This fund, with a
Morningstar Analyst Rating of Silver, is an excellent
option run by Chuck Myers. As you may recall,
Myers’ other fund,
Fidelity Small Cap Discovery
FSCRX
, was closed in January.
Fidelity Small Cap Discovery had been getting
the lion’s share of inflows, but, when that spigot was
shut off, Fidelity Small Cap Value started getting
a fair amount of new money. Thus, Fidelity stepped in
to close this one, too.
Merger Means Key Departures at Artio
Artio Global has agreed to be acquired by Aberdeen
Asset Management
PLC
. The two firms have been
going in opposite directions. Aberdeen has grown
rapidly, and its emerging-markets strategy is one
of the biggest in the world. Meantime, poor perform-
ance and big outflows have led to staff cuts at Artio.
Aberdeen said it will retain the Artio bond team
that runs Bronze-rated
Artio Global High Income
BJBHX
. However, Richard Pell and Rudolph-Riad
Younes are not expected to join Aberdeen when the
deal is complete. The pair manages
Artio Interna-
tional Equity
BJBIX
and
Artio International Equity
II
JETAX
. Those funds had a long record of success
but have been poor performers in recent years.
Vanguard Spices Up Bond Sleeve of Its Target-
Date Funds
Vanguard will add foreign bonds to its target-date
and asset-allocation fund of funds for the first
time. The firm will allocate
20%
of the target-date
bond sleeve to hedged foreign bonds and will make
the same allocation change to its LifeStrategy and
Managed Payout funds. The funds will use the new
Vanguard Total International Bond Index, which
Vanguard intends to launch by the end of the second
quarter, to get the exposure. The family also will
change the way the target-date funds get Treasury
Inflation-Protected Securities exposure by swapping
Vanguard Short-Term Inflation-Protected
Securities Index
VTIPX
for
Vanguard Inflation-
Protected Securities
VIPSX
. Lastly, the target-
date funds will no longer invest in Vanguard Prime
Money Market. The total fixed-income allocations
of the target-date series will remain the same.
Vanguard said the changes will further diversify
the fixed-income exposure of these funds, which can
help reduce volatility. Previously the Target Retire-
ment funds invested solely in the investment-grade
U.S. bond fund
Vanguard Total Bond Market
II Index
VTBIX
for most of their glide paths before
adding small allocations to Vanguard Inflation-
Protected Securities and Vanguard Prime Money
near their retirement dates.
œ
